Franchise Pictures Faces
Probe Over Budget Fraud

By

Bruce Orwall Staff Reporter of The Wall Street Journal

Updated June 6, 2002 12:01 a.m. ET

LOS ANGELES -- Independent film-producer Franchise Pictures, the company headed by flamboyant nightclub owner Elie Samaha, is the subject of a federal criminal inquiry examining allegations of fraud involving the budgets of Franchise's movies, according to people familiar with the matter.

Mr. Samaha and Franchise have been embroiled for the past 18 months in a nasty legal battle with the German company Intertainment AG, which had a deal to finance 47% of the production budget for Franchise's films in exchange for the right...